Li Wangyang's death led to protests in Hong Kong. Relatives and friends say the veteran Chinese activists was too frail to hang himself. Photograph: Vincent Yu/AP

Human rights groups have warned of a crackdown on relatives and friends of a veteran Chinese activists who questioned his strange death, after one was arrested for inciting subversion of state power.

They believe Zhu Chengzhi is being punished for flagging the suspicious circumstances of his friend Li Wangyang's death.

Li was found dead in his hospital room in June, two days after the anniversary of the bloody crackdown on pro-democracy protests in Tiananmen Square in 1989. He had served more than two decades in jail for his role in campaigning for workers' rights before he was released last year.

Officials in Shaoyang, Hunan province, initially said he had killed himself, but later described his death as an accident.

Police promised to investigate after thousands signed an online petition and tens of thousands demonstrated in Hong Kong, but concluded again that it was suicide.

Relatives and friends said Li showed no signs he was suicidal, that his feet were on the floor when he was found and that they believed him physically incapable of hanging himself because of his poor health.

"In the early stages, when Hunan provincial authorities agreed to conduct an investigation and make public their findings, we were somewhat encouraged. [Now they have] resorted to the same old tactics of closing the case by trampling on the rights of the family and others," said Catherine Baber, director of Amnesty International's Asia-Pacific programme.

"This is a horrific case. After two decades in prison, Li Wangyang was left with his health devastated. He died in highly suspicious circumstances under state care. For his family to disappear and now for his friend to be prosecuted, it appears as a whistleblower, is truly shocking."

Friends have been unable to contact Li's sister and brother-in-law since shortly after his death. Officials have said the couple have chosen not to speak to people. Other activists were detained.

"Zhu's arrest has ripped away any remaining pretence of official justice for Li. Instead of launching a 'transparent' inquiry as the government had originally promised, it has gone after Li's family and friends, silencing and punishing them," said Wang Songlian of the Chinese Human Rights Defenders Network (CHRD).

Zhu was first held in June, but his wife has now been told he has been formally arrested. Inciting subversion of state power, a charge often used against activists and dissidents, carries a jail term of up to 15 years, although in practice sentences rarely exceed 10 years.

CHRD said Zhu is held at the Shaoyang city detention centre, where phone calls rang unanswered. Police referred queries to a number that was out of service.

One account suggested Zhu was arrested because he took pictures of the death scene and shared them online.

The South China Morning Post, quoting another activist, said Zhu was initially detained because he refused to sign a statement disowning comments he made questioning the official account of Li's death.

Immediately after his friend died, he told the Hong Kong newspaper: "I simply don't think it was a suicide because Li was the kind of guy who would never commit suicide, even if a knife was held against his neck."